perfidy

"The fixation on competition in this country inexplicably excludes competition from government,"

That's true, and it's also probably a good thing. Because unlike your garden-variety business, government will always have more money - money that is not theirs - to play with. And since they are not a "business" in the same sense as their competitors, the risks are less, well, risky. I'm not a 100% free marketeer (well, 95%...), and the idea of the government competing in price wars for health care makes me shiver.

Take the example of DHL, the freight carrier. They're cheap as heck! They've been on a big advertising push, and they have taken market share away from UPS and FedEx. Do you know who owns DHL? The German government. They can work cheap because any losses are subsidized by the entire tax base of Germany.

Why does that make me shiver? Because of what you say next ... "as long as the government isn’t allowed to cheat."

Why wouldn't the government cheat? That is, why wouldn't the government avail themselves of every competitive advantage they have whether financial, structural, or statutory? And what happens if they get caught *cheating*? Who, exactly, will prosecute that?

I can't match Kevin Drum's kung fu on health care - I think he writes insightfully and intelligently on the matter and he has some good ideas. But I don't think this is the right road to go down.

Would *you* drive a government-built car?

Like a Trabant?

Dale Franks at Q and O has an involved discussion on this very topic

Exactly. Like a Trabant. I realize I was too facile in my first comment. I completely agree with Ross that health care is one of those things about which "SOMETHING MUST BE DONE!!" and I am open to ideas about making vouchers work. I shouldn't pee all over them out of fear; that's what dogs and raccoons do. But for many of the reasons stated in the QandO discussion, there are some serious hurdles to really making health care vouchers work that I doubt the government has the wherewithal to face.

I mean, if they can't even take care of the AMT...

Seems to me your concerns about cheating are misplaced -- are you a big fan of the pharmaceutical industry?

Bottom line is that there's no government in health care in this country, except that the government is the ultimate reinsurer of health (through emergency room visits, medicare and medicaid), and pays through the nose for the "privilege".

Americans pay a multiple of what citizens of other countries pay for their healthcare, and don't even crack the top ten list for outcomes. So where is all that money going? Cheatin' drug companies, and cheatin' health insurance companies. It sure isn't going into the hands of doctors.

Canada's got something called a "crown corporation". It's essentially a semi-private, state-run enterprise. It's owned by the public, but runs like a business. It can't levy taxes, and it can't "borrow" money from the government. What goes in matches what comes out. This sounds like a pretty damn good mechanism for structuring local health care. An urban municipality can set up its own non-profit for handling health care. It collects cash that comes in from the vouchers, and does the best it can to provide services in return. Local elected officials act more or less in the capacity of directors on the board; beyond that it's run like a normal company, minus the profit motive.

If private industry is so fabulous at eaking out efficiencies then a state-owned company like this should have its ass handed to it, right?

So why exactly shouldn't this be tried? The purpose of having 50 states is having 50 incubators for ideas, and the sooner one of them gets started the better.

Hey, semi-public health insurance companies are fine - that's all good for me as experimentation is a good idea. Just so long as we try it small scale before going Hillary on the thing and instituting a federal program.

Part of the problem with our medical costs is that there are really no market mechanisms at all in the health care system. We really ought to at least try that before flipping the thing over to the government. The individual health care consumer has no incentive to ration or control costs, since his insurance makes everything effectively free. Sure, he gets some deductions from his payroll, but his employer is picking up a large part of the tab. All of that is invisible.

What he sees is that all medical care costs $10, no matter what it is, or where he gets it, or whether it's truly needed. That creates a problem, because there is no market pressure to economize, create efficiencies, or control costs. From any part of the system. Through in spurious testing/ass-covering as a result of malpractice suits, and expensive drugs, and you've got our current nightmare.

Insurance should cover catastrophic or exceptional costs. I think the analogy with car insurance is a valid one. If car insurance covered oil changes, they wouldn't cost $20, that's for damn sure.

But one problem with medical care is it's hard to say whether you *need* it or not.

When I went to the doc earlier this year with a persistent heaviness in my chest, it took *three months* and a *buttload of expensive tests* to eliminate all the possibilities, from AIDS to cancer.

I only went at first because I knew it was $10, and hey, colds don't usually stick around for four weeks, do they? Had I had an insurance situation where a doc visit was more costly, or where the CT scans, X-Rays or various blood tests were high per-incident charges, there is no way I would have been able to afford to find out what was going on.

At the end of the day, it was nothing. But it took a *whole lot of somethings* to eliminate lupus, embolism, lung cancer, fungal infection, testicular cancer, liver cancer, internal injury, AIDS, tuberculosis, etc. All I'm saying is that there are some serious advantages to cheap health coverage that really only become truly clear when you need a lot of it. I can't afford a pay/go system. I don't have cancer or TB, but what if I did?

At what point do costs become "catastrophic" or "exceptional"? I can imagine a vouchers/socialized medicine scenario under which I would have paid through the nose to diagnose my Four-Month Mystery Ailment. Maybe if it turned out to be "something," my costs would have been retroactively covered. But since it was, according to the doctors, "probably persistent viral pneumonia, but we can't really be sure, call us if it comes back," and I'm therefore fine now, would I under another system be fine but in debt past my eyes?

This is where the car insurance analogy, which to a point is a good one, breaks down. You can trade in a car for a new one. My lungs are mine for good.

Johno, you kept taking tests because a) you had a persistent problem, and b) previous tests did not identify the problem. That's fine. I was talking to a friend of mine the other day, and her new doctor (she had switched insurance providers) wanted her to take a test. First, she had already had the test less than a year previous. Second, she had no indications of a problem that would require a test. When she asked how much it cost, no one in the doctor's office had the least clue as to the price of the test. They just did it for every patient.

That's the kind of thing I'm talking about. If you're young, healthy and full of vim and vigor, a high deductable catastrophic insurance would be appropriate. Get a checkup every couple years, go to the doctor if you're sick and to the hospital if you're injured. Other people would have different needs. The voucher idea could work, because aside from providing funds, the government isn't setting prices or deciding what kinds of procedures are acceptible. It would introduce some market mechanisms.

We just need to keep doing the research so that we can trade in our lungs for new ones.

B, that's fine, and a shining example of how marketization could lead to more rational health care choices.

But it doesn't speak to my point. Which was, how does a system distinguish between your friend whose doctor recommended a probably unnecessary test, and me, who had a Mystery Ailment for which many tests must be done. If I am sick, I have a persistent illness, and the first round of tests doesn't find the issue, I have a problem with the second and successive rounds of tests being financially challenging.

My central issue is in making sure, as far as is practicible, that sick people be able to get care, cost be (mostly, somewhat, within reason) damned. Of course there is a difference between asking someone to foot the whole bill for a boil-lancing, and asking someone to foot the whole bill for treatment & rehab after a bad auto accident. The auto accident, hopefully, would qualify as catastrophic and therefore be paid for largely through insurance.

But what about the in-between? You write, "Get a checkup every couple years, go to the doctor if you’re sick and to the hospital if you’re injured." How, in transitioning to a different healthcare system, do we make sure that the biggest humanitarian problem in health care today - the millions of children and adults who have no insurance and no money to afford even routine care - doesn't get spread over an even wider swath of the populace because it costs $200 for a checkup or whatever? Beyond the actual poverty cases, there's a hunk of the populace who just won't go through the trouble for the cost, to the eventual detriment of their health.

I know it's blatant self-interest, but I had a really bad winter, and I am not particularly interested in reforming health care to where treating my malady would have cost as much as overhauling my car.

Should it cost $200 for a checkup? How much is a doctor's time worth? Or the nurse that you actually spend most of your time with?

The voucher thing would help a lot - the young person in the example would pay less for his regular insurance and pocket the rest. Other people would pay more for different insurance, and spend more on doctor visits. If they wanted still greater care (or coddling, or tests, or whatever) they could pay it out of pocket.

The voucher would be sufficient to buy decent health insurance and pay for a doctor visit or two. Companies could supplement it, or you could yourself. Of all national health care plans, this seems the least bad.

Agreed. I guess I'm just trying to parse the possibilities for my own interest; I'm not very "wieldy" when it comes to vouchers and need to get my head around some things.

I worked for a health insurance company for several years. The overhead costs for U.S. health insurance are driven almost entirely by runaway government regulation.

Most insurance is state regulated. Therefore an insurance company must file their contracts with the Department of Insurance (DOI) in each state that they plan to sell. Depending on the state, this is a 6-month to 2+ year legal odyssey. New York’s insurance laws require that an insurance carrier has to follow New York rules in every state they do business. Since this is almost impossible to comply with, most companies create an independent subsidiary company to do business in New York to avoid that piece of regulation – welcome to overhead city and attorney paradise.

Then there comes the state mandates on healthcare providers. Some states require insurers to pay for 1 nights of hospitalization after a natural birth, some for 2 nights, some for 3. Some states require mammograms starting at age 40, some at 45, etc… Then some state senator’s kid will get a rare disease and they pass a law requiring special treatment for Wilm’s disease in Idaho. So we end up with 50 + different sets of rules.

Then the federal government gets in the act with regulations on privacy and everything else you can imagine. The end result is buildings full of lawyers, auditors, and programmers trying to deal with all this regulation. Of course a government run health system would have less overhead – they caused it all to begin with.

If you want to lower costs, federalize the regulation of healthcare so there is only 1 set of laws and regulations for the entire country. Make those regulations straightforward and sensible. Get the state DOI’s out of healthcare entirely. Sadly, we will then have to hear about all those poor laid-off corporate lawyers and state bureaucrats.

"we will then have to hear about all those poor laid-off corporate lawyers and state bureaucrats."

And isn't that reason enough to charge full speed ahead?

Thanks Bram. That's really good information.

Hmm...... Minarchy in health care?

Someone's been listing to the Diane Rehm show again.

Here's my biggest fear about socialized medicine (which I'm for, BTW): My biggest fear is that it will take a person in Stage III cancer and make them a Stage IV patient because of waiting lists and bureaucracy. One friend is going through breast cancer treatment right now and she's pretty sure that if she picked the HMO option at work, that she'd have stage IV because of all the pre-approving business you have to go through. She's on a PPO now and she gets better service.

What happens to a Stage III patient in the US without insurance? How long is that waiting list?

Don't fall into the trap of believing that the US medical system is a high quality universal provider. It's far from it, and its overall results are piss poor for the money spent.

Instead of having private insurance companies tripping all over themselves trying to comply with state regulations, spending billions in the process, wouldn't it make more sense to simply have doctors deciding how many nights of hospital stay a particular patient needs?

Regulations are disconnected from reality, but regulations dictate how the interactions between private organizations and patients, or private organizations and governments, must take place. Current insurance companies _cannot_ act on the basis of common sense, necessity, or priorities; they'd be sued into the ground if they tried it. This results in a lot of pointless overhead.

Somebody please explain to me exactly what benefit the private insurers are bringing to the party? Your generic answer is, they're doing a better job than the government could. Except that's flatly not true -- government health agencies in other countries do a dramatically better job in delivering fiscally efficient health care (and gaining positive outcomes).

Ross:

While I'm not sure it's required that the private providers should be forced to compete with government, I'll see your inflammatory rhetoric and raise you one flaming rhetorical unit.

I think that, in the present environment of 15% per annum increases in healthcare costs, the private providers should be forced to compete with however many of whomever else (government or not) as are required to get them to squeal and whine about it. That's how we'll know we're getting the best available services.

And if that "whomever else" happens to be the government, then so be it - particularly on the terms you laid out: survival of the one who keeps its patients the fittest.

I'm no fan of government monopolies on services, but the same logic forces me to be no fan of private market monopolies that exclude government participation options. In an even-handed voucher system that favors neither private nor public provision, the market itself can be allowed the final say.

And if that “whomever else” happens to be the government, then so be it - particularly on the terms you laid out: survival of the one who keeps its patients the fittest.

I want you guys all to know that this is a theoretical fallacy of talking about healthcare purely under an economic model. The idea that the doctor who is most successful at keeping his patients 'fit' is going to survive is simply not true.

This now gets into Ross' next favorite healthcare hot topic...Tort reform.

The friend I mentioned earlier went to see a private practice doctor who has had a good track record with pregnant patients who need cancer treatment. That drives business to this doctor, but my friend can't afford her. If this doctor gets enough business where patients are unable to pay, it's going to drive the doctor out of business, or drive the doctor to charge exorbitant fees to those who can.

Or one or two malpractice suits, whether good or bad, might cause this doctor's malpractice premuiums to spiral out of control and then what you do have? A competent doctor who no longer wants to practice in that state or leaves medical practice entirely, which is precisely what is happening to obstetricians in the state of Maryland. A lot of them are moving out state to practice where premiums are lower.

The QUALITY of care doesn't have much to do with the availability of care. I think in comment 14, Ross assumes that I believe that quality and availability are the same thing, which I do not. Healthcare access sucks in the US based on ability to pay. For example, if you have no insurance, you probably never see a doc for preventive care. If you have no insurance and are poor enough, you get to join the queue of Medicare/Medicaid and WIC. If you are lucky enough to have health insurance provided to you, you can see nearly anyone you want, but you might have to pay a premium for an out of network doctor.

What makes me nuts is the cost of overhead of medicine in the US. I don't know why ppl get charged out of control for Tylenol and latex gloves. I'll bring my own med supplies to the doctor since I can get those things cheaper from CVS than the dispensary at the hospital.

Added to that the Healthcare Information Systems being used by large facilities and it's quite insane. HIPAA's privacy and audit demands are ridiculous. I'm not saying all regulation here is bad, because I think there's some of that in the thread above, but sometimes there are BAD laws with good intentions and HIPAA has some bad provisions.

Can you tell I've been on lateshift again?

My friend's wife is a highly competent, board-certified ob-gyn here in Virginia. She stopped practising three months ago -- since there's only ONE malpractice insurance company in this three state area, the quote she got sucked. In fact, if she ever stopped her coverage, she would have been required to write a check for two full years premium. Net result? One less ob-gyn.

The crazy part of the equation is that many of the uninsured contribute mightily to the health care system, in the form of medicare/medicaid taxes. The US spends almost as much for those two programs ONLY , per capita, as other countries spend for their entire universal health care systems.

The part I don't understand is why this ridiculous and deadly situation is protected so vigourously.

Underlying mapgirl's comment is the real, current question: Where does that healthcare dollar go? I'll see if I can find out.

Patton: This government recently passed legislation that _prohibited it_ from negotiating prices with Drug companies; juxtapose that against your acceptance, on equal footing, of government vs. private competition in health care.

Ross:
Your example is an excellent one. I didn't claim that's the way things are being done now, of course, but I think that as for provision of health care services, distinct from how they're paid for, even-handed competition, whatever its source, is a good thing. The Medicare prescription drug benefit passed by the US gubmint was, in its details, prima facie retarded, I think we can agree.

The issue mapgirl brings up is a valid one, and while I'd never, ever get into an argument with her, I'd respectfully suggest that provision and payment are two different things. The problems with providers of services can be solved using methods that may not make any (social) sense if they were applied to the payment for those services.

Oh, and regarding the Virginia OB-GYN: situations like that are obscene. I used to know an anesthesiologist who was driven out of business by malpractice insurance costs. That was a good thing - he sucked, and he did some real harm, so his increasing rates were based on the claims against him. But insurance carriers, these days, seem utterly averse to risk. And if they're not correctly discriminatory, leaving the good docs to continue to practice while exterminating the bad, then the insureres serve no useful purpose, if you ask me.

I'm no fan of insurance companies, as I presume you can tell. I'm only moderately warmer toward attorneys, my own excepted.

Patton writes: The issue mapgirl brings up is a valid one, and while I’d never, ever get into an argument with her, I’d respectfully suggest that provision and payment are two different things. The problems with providers of services can be solved using methods that may not make any (social) sense if they were applied to the payment for those services.

Oh f*ck. tee hee. Patton, go ahead and argue with me. I seem to have the time this week.

I think I need you to elaborate on the meaning of 'provision' because you are right, payment, i.e. compensation is something else entirely within the debate of healthcare economics.

Other than that, I'm just kvetching late on a Friday night after an evening of drinking. Lucidity is not at a premium here.

Ross' post, from the third paragraph on, was about competition for payment between providers of service, such as private hospitals and medical groups, and the competition they could experience from government-run medical institutions.

Among these providers, I think that unfettered competition should be allowed, nay, encouraged. To do so would require that payment schemes were non-discriminatory, and that health care vouchers should be good for use with any provider, private or government.

The confusion, of course, comes in when you have service providers who are also payors. Clearly, that describes government, which is on both sides of the equation. It also covers any health insurer that has divisions that provide care services. Aside from the unfortunate conceptual resemblance to the (failed) 1996 telecom reform act, I'd propose that a big black line exist between payors and providers. This would require that health care vouchers be usable just like cash, at any provider of the patients' choosing. Equal access to infrastructure choice, then, regardless of who's paying for it.

The insurance companies, of course, have access controls built in to their contracts as well, such as the differences between HMOs, PPOs, and whatever other Os they offer these days, reimbursing less for "out of network" services. But in those cases, the insurance itself costs less, to make up for the lost freedom.

If insurance payors (or a health care voucher issuer) allowed people free choice of caregiver, then perhaps the cream of healthcare practitioners could rise to the top and the crap, such as my anesthesiologist acquaintance, could sink to the bottom.

Just as Gaia intended.

(note: I've scrupulously avoided the opportunity to pick at the other half of this issue, the presumption that insurance should just be considered pre-payment for all the doctor visits one cares to take. Cases like Johno's winter ailment make such arguments difficult for me. But lack of health insurance, or lack of a "fully-loaded" health plan isn't the same as lack of health care.)

Apropos something, perhaps even something related to the topic at hand here - Canadian">http://chealth.canoe.ca/health_news_details.asp?news_id=14778&news_chan… courts don't all seem to agree on the universal goodness of the Canadian healthcare model

OTTAWA (CP) - The country's top court has delivered a powerful blow to Canada's single-tier public health care system, striking down a Quebec law that banned private insurance for medically necessary services.

Damn, pardon my ignorance, but it hadn't occurred to me that it would be illegal in Canada to take responsibility for health services payment into your own hands and out of the government's, if you think the government's not doing a good job. Is that true in all provinces, or just Quebec?

Further down in the article:

Health Minister Ujjal Dosanjh said governments can prevent the rise of private health care by strengthening the public system. "We are already on the way to doing that. That is the crux and the thrust of our approach."

That sounds a lot like the obverse of what's been discussed so far in this thread - the government as single payor disallowing the use of other, perhaps more willing, payors.

God forbid we should ever end up with such a fucked up set of perverse incentives here, if you'll pardon my French Canadian.

Keep in mind that Canada doesn't have a single-payer system. There are ten systems, one for each province, each run differently. The federal government funds the systems through transfer payments, and each province supplements that according to its own rules. Quebec seems to have a law preventing private medicine; I don't believe that law is present in other provinces. The rule in Ontario is that you cannot "extra-bill"; that is, you either pay the whole bill yourself or the government will pay the whole bill. Years back many doctors would charge the government the standard fee then bill patients for additional money.

So the rule in Ontario is that you can pay for private medical services all you want, but the government won't participate.

Quebec has its own legal system and a rather unique set of historical constraints and traditions...the rest of Canada does not follow suit.